Textron (TXT) Q4 Earnings Lag Estimates, Revenues Fall Y/Y

·5 min read

Textron Inc. TXT reported fourth-quarter 2021 adjusted earnings of 94 cents per share, which missed the Zacks Consensus Estimate of 98 cents by 4.1%. The bottom-line figure also deteriorated 11.3% from the year-ago quarter’s figure.

Including one-time items, the company posted GAAP earnings of 93 cents per share compared with $1.03 generated in the year-ago quarter.

For 2021, the company reported adjusted earnings of $3.30 per share, which missed the Zacks Consensus Estimate of $3.34. However, full-year earnings improved from 2020 earnings of $2.07 per share.

Revenues

Total revenues came in at $3,322 million, which missed the Zacks Consensus Estimate of $3,373 million by 1.5%. The reported figure also decreased 9.4% from the year-ago quarter’s $3,667 million on lower contributions from each of its segments.

Textron Inc. Price, Consensus and EPS Surprise

Textron Inc. Price, Consensus and EPS Surprise
Textron Inc. Price, Consensus and EPS Surprise

Textron Inc. price-consensus-eps-surprise-chart | Textron Inc. Quote

For 2021, the company recorded revenues worth $12.38 billion, thereby lagging the Zacks Consensus Estimate of $12.41 billion. The full-year revenues however improved from $11.65 billion in 2020.

Manufacturing revenues decreased 9.4% in the fourth quarter to $3,311 million while revenues at the Finance division declined 15.4% to $11 million.

Segmental Performance

Textron Aviation: In the quarter under review, revenues at this segment declined 12.9% year over year to $1,359 million. The decline was primarily due to lower aircraft volume.

The company delivered 46 jets, down from 61 in the year-ago quarter. It also delivered 43 commercial turboprops, down from 61 in fourth-quarter 2020.

The segment generated an operating profit of $137 million in the quarter compared with $108 million earned in the year-ago quarter, owing to favorable pricing and improved manufacturing performance. The order backlog at the end of the quarter was $4.1 billion.

Bell: Revenues from this segment slipped 1.5% to $858 million, primarily due to lower military volume.

The segment delivered 59 commercial helicopters in the quarter, up from 57 last year.

Segment profits were down 20% to $88 million on account of lower volume. Bell’s order backlog at the end of the quarter was $3.9 billion, down $1.4 billion sequentially.

Textron Systems: Revenues at this segment came in at $313 million, down 12.3% from the year-ago period. The deterioration can be attributed to lower volume, which included the impact of the U.S. Army’s withdrawal from Afghanistan on the segment's fee-for-service contracts.

Segmental profits declined 8.2% year over year to $45 million in the fourth quarter due to lower volume.

Textron Systems’ backlog at the end of the fourth quarter was $2.1 billion, down $0.5 billion sequentially.

Industrial: Revenues at this segment declined 9.8% to $781 million due to lower volume and mix, largely in the Fuel Systems and Functional Components product line, reflecting order disruptions related to the global auto OEM supply chain shortages,

Moreover, segment profit was $38 million compared with $55 million in the previous year quarter. The deterioration can be attributed to a lower volume mix.

Finance: Revenues at this segment decreased to $11 million from $13 million in the year-ago quarter.

Financials

As of Jan 1, 2022, cash and cash equivalents totaled $1,922 million compared with $2,146 million as of Jan 2, 2021.

Cash flow from operating activities amounted to $1,469 million as of Jan 1, 2022, compared with $833 million as of Jan 2, 2021.

Capital expenditures were $375 million in 2021 compared with $317 million in 2020.

Long-term debt was $3,179 million as of Jan 1, 2022, compared with $3,198 million as of Jan 2, 2021.

Guidance

Textron expects to generate adjusted earnings in the range of $3.80-4.00 per share in 2021 on revenues of $13.3 billion. The current Zacks Consensus Estimate for 2022 earnings is pegged at $4.03 per share, higher than the guided range.

The consensus mark for revenues, pegged at $13.39 billion, also lies above the guided figure.

Zacks Rank

Textron currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Defense Releases

Lockheed Martin LMT reported fourth-quarter 2021 adjusted earnings of $7.24 per share, which surpassed the Zacks Consensus Estimate of $7.23 by 0.1%. Its net sales amounted to $17.73 billion, which outpaced the Zacks Consensus Estimate by 0.4%.

Lockheed Martin ended 2021 (on Dec 31, 2021) with $135.36 billion in backlog compared with $147.13 billion at the end of 2020. Its cash from operations at the end of 2021 amounted to $9.22 billion compared with $8.18 billion a year ago.

Raytheon Technologies’ RTX fourth-quarter 2021 adjusted earnings per share (EPS) of $1.08 beat the Zacks Consensus Estimate of $1.01 by 6.9%. Its sales of $17,044 million missed the Zacks Consensus Estimate of $17,215 million by 1%.

Raytheon Technologies had cash and cash equivalents of $7,832 million as of Dec 31, 2021, compared with $8,802 million as of Dec 31, 2020. The company currently projects adjusted EPS in the range of $4.60-$4.80 for 2022.

Boeing BA incurred an adjusted loss of $7.69 per share for fourth-quarter 2021, much wider than the Zacks Consensus Estimate of a loss of 9 cents. Its revenues amounted to $14.79 billion, which missed the Zacks Consensus Estimate of $16.96 billion by 12.8%.

Boeing’s backlog at the end of fourth-quarter 2021 increased to $377.50 billion from $363.40 billion at the end of 2020. The company’s operating cash outflow at the end of 2021 was $3.42 billion compared with $18.41 billion at the end of 2020.


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